A new study by the IPA and Nielsen Analytic Consulting published today (29th July 2009) shows that share of voice continues to drive brand growth, and without investment here, innovation in media and creativity is wasted. The results of this study provide the industry, for the first time, with a robust market-based data source at a critical time for budget discussions; at the start of the second half of 2009 and at the beginning of the budget planning cycle for 2010.
An average campaign for an average brand can be expected to deliver market share growth of 0.5 percentage point for every 10 points of excess share of voice (ESOV); where excess share of voice equals the difference between share of voice and share of market. Brands that allow their share of voice to fall below their share of market lose market share in the same proportion.
View a preview of the study
The study was commissioned by the IPA to validate and build on findings from the IPA dataBANK, published in ‘Marketing in the Era of Accountability’. Nielsen analysed 123 FMCG brands across 30 categories, with a wide spread of market share levels and rank positions in category, bringing together their unique combination of media and retail audit data to examine the effect of share of voice from all the other factors that affect growth.
Applying these numbers to an analysis developed by the IPA last year, the study goes on to map out a number of investment scenarios for a typical brand and their effect on its market share; acting as a warning to those who decide to disinvest in on and offline media during or going out of recession.
Now that the methodology and norms have been set all marketers and their agencies will be able to model the relationship between excess share of voice and share growth for their category and brand.
The data also highlights the importance of the quality of advertising alongside the quantity of advertising. Comparison between Nielsen data and data from proven highly effective campaigns in the IPA databank shows that IPA-grade campaigns are on average around twice as effective as the ‘typical’ campaigns in the Nielsen sample.
Other features of the study are:
• larger brands enjoy an advantage in terms of the extra growth they get compared to smaller brands for every point of excess share of voice. Smaller brands are therefore particularly vulnerable to share loss if they fail to maintain or grow their share of voice. They need to invest in other marketing activities to support the brand.
• the positive impact of distinctive creativity in triggering high levels of word-of-mouth.
The report sets a handy set of guidelines for budget setting:
1. For an average campaign for an average brand expect market share growth of 0.5 percentage point for each 10 points of excess share of voice (ESOV)
2. On average, brand leaders can expect 1.4 percentage points of growth while challenger brands can expect a more modest growth of 0.4 percentage points of share.
3. Creative quality helps average campaigns work harder. Buzz and new news enhance quality.
Commenting on the findings of the study:
Says Janet Hull, IPA Consultant Head of Marketing: “It’s the potential application of this new data that makes it so exciting. Used appropriately, every brand owner and planner now has the opportunity to demonstrate to finance the sales and profit implications of different budget decisions. And clients and agencies can work together to create realistic targets for Payment By Results, based on performance in excess of the norm expected.”
Says Nikki Clarke, Market Mix Consultant, Nielsen: “Brands that choose to invest in effective campaigns and correct SOV levels will emerge in a stronger position, in terms of market share and equity. Nielsen are well-placed to provide the benchmarks needed to achieve this.”
Says Peter Field, marketing consultant and co-author of ‘Marketing in the Era of Accountability’: “This ground-breaking study by Nielsen validates the findings of the IPA dataBANK. It adds hugely to the authority of the dataBANK as a research tool, and should ensure that companies are fully aware of the need to grow share of voice relative to share of market, particularly coming out of the downturn.”
The report costs £10 excluding VAT for members and £25 excluding VAT for non-members and is available to purchase here